Saturday, April 23, 2011

Memo to US Congress: "Hello?" Medicare is an Insurance Benefit!

Okay, I've tweeted, blogged and posted all over the Internet about Medicare being an insurance benefit.

It's supposed to be paid for with premiums deducted from beneficiaries' Social Security checks plus the contributions made from payroll FICA withholding. So, last night on the PBSNewsHour with Jim Lehrer, there sits intellectually savvy David Brooks railing on Mark Shields about how money paid to Medicare is holding back our nation's ability to meet Medicaid obligations. Oh boy! This is exactly how misinformation gets perpetrated. There's absolutely no way this lowly blog will educate Mr. Brooks about what he doesn't know, but I'm going to at least try "Medicare 101":

1. Medicare is the best health insurance program in the world. (Yes, David Brooks, in the world!). Because the cost controls are built into reimbursement caps to providers while premiums are supposed to meet the costs. So, it's true, it doesn't really happen like that, but why? Well, before Medicare was sold to Managed Care, the administrative cost of the program was less than 10 percent. Then, of course, the Republicans wanted their insurance company friends to have a piece of the "aging of baby boomers" insurance pie, so the US Congress was sold on the idea of "competition", and Medicare Managed Care proliferated. It was an awful decision except for one provision. Medicare Managed Care put more emphasis on wellness initiatives thereby helping the insurance programs to become better than "sickness care". Everybody knows, keeping people well brings down the cost of sickness care. But, in order to reach this astounding conclusion, Medicare Manged Care consumed 25 percent of the money received from qualified beneficiary contributions, i.e., money used for advertising and administrative cost. If US Congress wants to bring down the cost of Medicare, they should go back to the tried and true intention of the program - let the Centers for Medicare and Medicaid Services (CMS) run the program, reduce the administrative cost back to under 10 percent, hold on to those wonderful and cheap wellness benefits and get rid of Medicare Managed Care. Meanwhile, CMS and MedPac, the group that advises Congress about Medicare and Medicaid policies, could recommend a risk adjusted premium/cost model whereby my first sentence in this explanation would become reality.

2. Of course, the above won't happen. So now what? I'll tell you what. By increasing the beneficiary pool who are enrolled in Medicare, the program would benefit from higher premium contributions while spending less money on those who are younger than 65 years old. It's a risk based model. Let's say you have 100 people in a pool of people paying into Medicare but they range in age from 21 to 100 years old rather than being 65 and older - it's simple math. Each beneficiary pays a defined contribution based upon their age, but let's average $115 a month into the program for each person per month. At the end of just one month, the sample Medicare program collects $11,500 from beneficiaries. Now, multiply this by 12 months = $138,000 in one year from 100 beneficiaries. Now, we see the 21 year old beneficiaries go a full year with no costs against the premiums. Perhaps 10 of the 50 year old beneficiaries use outpatient services at a total aggregate cost of $30,000. We now see a remaining $108,000 left in the fund to use for the roughly 85 other beneficiaries. This is how Medicare should work. The remaining $108,000 should be spent with less than 10 percent allocated for administration and the remainder of the money could be put toward the cost of providing care. Some people in the 85 persons risk sample will be healthy and not use any of the money while one person will likely consume about 25 percent of the entire pie. An actuarial analysis can be done based on something like my model and, "Voila!", Medicare can become a wonderful risk adjusted insurance program where everyone shares in the benefit, not just the expensive to care for 65 plus year old beneficiaries.

3. Medicaid, on the other hand, is nothing like Medicare. It's a federal poverty program that's going broke because nobody seems to want to fund poverty.

4. Medicare, on the other hand, can be risk adjusted, the premiums can be increased or decreased based upon actuarial data and - MOST IMPORTANT - payments to providers like doctors and hospitals can (and are!!!) capped!!! So, if the program is running deficits, the risk of running out of money can be shared between providers and beneficiaries - higher premiums and capped reimbursement.

Obviously, my simple Medicare 101 blog cannot cover the thousands of pages of Social Security, Title XX and Medicare laws which have been amended countless numbers of times.

Therein are the programs detail problems, i.e., the volumes of paperwork associated with these huge programs have a daunting effect on people's ability to learn the basics - like Mr. David Brooks, who speaks as though he has authority and knowledge when he has neither when it comes to the differences between Medicare and Medicaid funding, reimbursement methodology and actuarial analyses.

Although I enjoy David Brooks, as he and Mark Shields are my two favorite pundits on television (thanks to NewsHour for carrying them weekly) it's clear neither of these gentlemen should speak facts about programs they don't understand. At least, in the Friday (April 22) commentary where Brooks mis-spoke, it was Shields who stood the moral ground in favor of protecting Medicare and Medicaid without assuming any authority about the concrete policies of either program.

Again, I say, make Medicare the single payer health insurance program it should be and include everyone who works over 21 years old in the beneficiary pool. For those who don't work, they should be included, so long as somebody pays their risk adjusted premiums based upon their actuarial data. Perhaps, by creating a Medicare single payer universal health program, we might even eliminate or marginalize the poverty Medicaid program for all but the most indigent and those who cannot care for themselves. But, let's face it, the reason our government is unwilling to try this sensible approach is because a ton of money is being made by private insurance companies to sell useless plans, charge high premiums and not pay providers their costs. So, as the political debate heats up to save Medicare, Social Security and Medicaid, we must educate people like David Brooks to understand the way Medicare should work.

Sunday, April 03, 2011

Maine Governor LePage and Other Iconoclastic People

People who overestimate their personal importance seem drawn to taking down popular public images. For example, I quietly worry about how America's insidious anti-immigration movement might perceive our famous Statue of Liberty in New York Harbor if the group ever became a majority political movement. The image of liberty is threatening to people who don't understand "liberty and justice for all".

Now, Maine's Governor of two months Lepage joins a list of iconoclasts. If he is allowed to get away with removing images of Maine's labor history by decreeing it "one sided", what other history might he be looking to change in the meantime? In my opinion, removing an otherwise benign mural puts the Governor in line with others like the Taliban who dynamited in 2001 the magnificent 6th century structures of the Buddhas of Bamyan, in Afghanistan; and let's add the Soviet Communists who in 1924 changed the name of St. Petersburg to Leningrad because they didn't want to be reminded of the Russian Czar.

People care about all of their history, the good, the momentous, the bad and the offensive. Political leaders should acknowledge the past while letting go of it.

For some unbelievable reason, iconoclasts are threatened by images offensive to them, the proverbial ego of one. As evidenced by the public aftershocks of Governor LePage's removal of a mural quietly hanging in Maine's Department of Labor office, iconoclastic acts cause collateral damage. Governor LePage is now the subject of national negative news coverage. One would think iconoclasts get the collateral damage caused by their selfish acts, but they apparently don't.

By removing the labor murals and storing them away from public view, Governor LePage was an equal opportunity iconoclast. He offended the State Museum Curators who wrote a statement opposing his actions. Backlash from Maine constituents of Republican leaders are likewise offended because they are distracted by trying to understand the Governor's actions. Mount Holyoke College President Lynn Pasquerella wrote to Governor LePage as reported in the Boston Globe, saying that removing the labor mural "conjures thoughts of rewriting history prevalent in totalitarian regimes."

History takes care of iconoclasts. US Congressional House Speaker Newt Gingrich's saw his tenure as a political leader short circuited after he removed a painting by Ralph Fasanella from the Capitol House labor committee room, a painting depicting the 1912 "Bread and Roses" strike in Lawrence, Mass, an event led by mostly immigrant women textile workers (Boston Globe "Revisionist Art History"April 3, 2011).

Maine Governor Lepage wants to tell the world how this New England state is open for business. But, by wasting time, money and political capital on iconoclastic actions, he sends the opposite and wrong message to potential employers and the state's employees who, by the way, are essential to the growth of ANY business.

And speaking of business....just where are those "employers" Maine Governor LePage was so concerned about offending because they were not depicted in the labor mural he abruptly removed from public view?

Iconoclasts must learn that the way to revise history is to look forward, not backward.

Saturday, April 02, 2011

GOP senators express 'dismay' with LePage | The Kennebec Journal, Augusta, METhe litany of state and national press Op-ed pieces full of criticism of Governor LePage and his actions as leader of Maine are becoming a deafening drum beat of disdain for a man who has set a bad tone for doing business in Augusta. I will be adding my own commentary soon but the above link is certainly a rebuke from reasonable Republicans who call it like it is. Thank you to Maine GOP for demonstrating leadership in the face of pressure, and calling on the carpet the actions of this distracting Governor.